International Tax Review is part of the Delinian Group, Delinian Limited, 8 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2023

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

EU: Financial transaction tax: Back on track (again)?

van-der-made.jpg

Bob van der Made

It is understood a number of meetings were held in the first half of January between French Finance Minister Sapin and French issuers, the French banking industry and non-governmental organisations (NGOs). Apparently, in a dramatic shift of position, France now supports a broader-based EU financial transaction tax (FTT) with a large range of financial instruments included in the scope, combined with lower tax rates. This move would align the French position more to that of Germany and the smaller ECP-11 member states (the countries participating in the enhanced cooperation procedure). At least one other big member state, Italy, is actively supporting the French on this initiative. Spain apparently is sitting on the fence. Although by mid-January no new documents or concrete compromise proposal had been circulated to the ECP-11, French President Hollande is intent on reaching an agreement on EU FTT with the ECP-11 as soon as possible in 2015.

Another not new, but revamped, French tax policy objective is to successfully complete the enhanced cooperation procedure on EU FTT, so enhanced cooperation procedures in other EU fiscal matters could also be initiated. It is understood that the EU Commission's CCCTB [common consolidated corporate tax base) proposal might for instance be a candidate for this, as there are rumours that the CCCTB proposal for a Directive would be cut up into three separate but inter-related pieces: first dealing with BEPS concerns (anti-abuse/GAAR), then the common base, then consolidation). France is apparently insisting on the fact that the ultimate goal is a harmonised FTT for the whole of the EU-28.

The timeline for the French plans for EU FTT would still be based on the political commitment made by the participating ECP-10/11 on May 6 2014, that is, the (first phase of the) FTT will enter into force by January 1 2016.

Apparently the plan is also to give the European Commission under the aegis of the French EU Tax Commissioner Pierre Moscovici a more active role in working out a final compromise text for the ECP-11, running data analyses and proposing ready-made amendments to the Commission's draft EU FTT Directive. This coordinating role is normally performed by the six-monthly rotating EU Council Presidency, however, none of the current or incoming EU presidencies until the second half of 2016 (Latvia, Luxembourg and The Netherlands) participates in the EU FTT ECP/enhanced cooperation procedure, so this would indeed be an effective way around any further delays.

The French shift is expected to make an ECP-11 deal on EU FTT more likely. There are still important aspects of the EU FTT to be resolved, such as the choice for the issuance or residence principle or a combination thereof, but the sense in Brussels is now that if the ECP-11 can agree on the scope, the other aspects may be agreed on, too, if there is a strong political will to do so.

In a joint letter issued on January 21, the French and Austrian finance ministers urged their colleagues from the ECP-11 to breathe new life into talks on the EU FTT and underscored their desire to see the tax introduced in 2016. The letter generally calls for a fresh start of ECP-11 talks regarding the scope and substance of the tax and a different working method, including more involvement of the European Commission. ECP-11 finance ministers will meet in the margins of the ECOFIN Council on January 27, after which more details should become available.

Bob van der Made (bob.van.der.made@nl.pwc.com)

PwC

Tel: +31 88 792 3696

Website: www.pwc.com/eudtg

more across site & bottom lb ros

More from across our site

Sandy Markwick, head of the Tax Director Network (TDN) at Winmark, looks at the challenges of global mobility for tax management.
Taxpayers should look beyond the headline criteria of the simplification regime to ensure that their arrangements meet the arm’s-length standard, say Alejandro Ces and Mark Seddon of the EY New Zealand transfer pricing team.
In a recent webinar hosted by law firms Greenberg Traurig and Clayton Utz, officials at the IRS and ATO outlined their visions for 2023.
The Asia-Pacific awards research cycle has now begun – don’t miss on this opportunity be recognised in 2023
An intense period of lobbying and persuasion is under way as the UN secretary-general’s report on the future of international tax cooperation begins to take shape. Ralph Cunningham reports.
Fresh details of the European Commission’s state aid case against Amazon emerge, while a pension fund is suing Amgen over its tax dispute with the Internal Revenue Service.
The OECD’s rules may be impossible for businesses to manage, according to tax experts from companies including Shell.
Sanjay Sangvhi and Sahil Sheth of Khaitan & Co explore this legal concept and its implications for companies doing business in India.
The UK government is now committed to replacing the ‘super-deduction’ with a 100% capital allowances regime to offset the impact of the corporate tax rise to 25%.
Corporate tax is set to rise in the UK for the first time in decades, but the headline rate remains historically low despite what many observers think.